In W.P.WRIT PETITION No.5571 of 2021-AP HC- First proviso to Sec.98 of AP GST Act puts embargo on Advance Ruling Authority to admit application where questions raised therein are already pending or decided by any proceedings in case of applicant under Act: Andhra Pradesh HC
Justices U. Durga Prasad Rao & T.Mallikarjuna Rao [23-11-2022]

Read Order: M/S MASTER MINDS v. APPELLATE AUTHORITY FOR ADVANCE RULING (GST) AND ORS 

Mansimran Kaur

Amaravati, January 31, 2023:  Proceedings conducted by the investigating authority under the provisions of the CST/APST Act shall be construed as judicial proceedings, the Andhra Pradesh High Court has held.

While allowing the petition via which the petitioner prayed  for writ of mandamus declaring the impugned order passed by the Appellate Authority for advance ruling as illegal, arbitrary and to set aside the same and pass further appropriate orders, the Division bench of Justice U. Durga Prasad Rao and Justice T.Mallikarjuna Rao observed that when investigation has already commenced prior to the filing of application, the ARA shall not admit the application as per proviso to sub-section (2) of Section 98 of CGST/APGST Act. 

Factual matrix of the case was that the petitioner was a proprietary concern and a leading educational institution providing coaching to students for obtaining educational qualifications viz., Chartered Accountancy Certificate (CA), Cost and Works Accountancy Certificate (ICWA) and their ilk. 

While so, the petitioner filed application for advance ruling vide (as per Rule 104(1)) of CGST Act seeking ruling inter alia on the point whether the coaching/training provided by the applicant for students for the above courses conducted by it fall within the wider meaning of the term ‘education’ and in relation to education and other related aspects. The Advance Ruling Authorityafter elaborate hearing passed its ruling vide order wherein the ARA held that the applicant was not eligible for the exemption under Entry No.66(a) of Notification dated June 28, 2017  as amended.

 It also gave rulings on the other related issues raised by the petitioner before it.

Aggrieved by the above rulings, the petitioner filed appeal before the appellate authority for advance ruling and after hearing; the appellate authority dismissed the appeal on September 28, 2020 by confirming the rulings made by the ARA. Aggrieved, the present writ petition is filed by the petitioner.

After considering the submissions from both the sides, the Court noted that the point for consideration was to determine whether there were merits in the writ petition to allow.

In view of the same, the Court noted, “Section 98(2) of the CGST/APGST says that authority may after examining the application and records called for and after hearing the applicant or his authorized representative, by order, either admit or reject the application”.  

Further, the Court stated that as per Section 70 of APGST Act, proper officer shall have the power to summon any person either to give evidence or to produce a document or any other thing in any inquiry in the same manner, as provided in the case of a civil court under the provisions of the Code of Civil Procedure.

 Such enquiry referred to in sub-section (1) shall be deemed to be judicial proceedings within the meaning of section 193 and 228 of the Indian Penal Code. Thus, “the proceedings conducted by the investigating authority under the provisions of this Act shall be construed as judicial proceedings as per the CGST/APGST Act”, the Bench said.

Any proceedings referred to in 98(2) proviso encompasses within it the investigation against the applicant as per the provisions of CGST/APGST Act and if by the date of filing of the application before the ARA, already such proceedings were commenced, the ARA shall not admit the application inviting advance ruling.  Senior counsel for the respondent had  not placed any contra citations before us to hold any other view, the Court further noted. 

Reference was placed on the cases namely, Maharashtra, v. Arihant Enterprises and Karnataka v. M/s.Karnataka Co-operative Milk Producers Federation Limited.

The Court thus observed that having regard to the legal position that when investigation has already commenced prior to the filing of application, the ARA shall not admit the application as per proviso to Section 98(2), the Court was hence of the view that the ARA should not have admitted the application in the instant case and issued its ruling. 

Therefore, the order was vitiated by law. This fact was brought to the notice of the appellate authority on the grounds of appeal. Therefore, the order of the appellate authority was also vitiated by law, the Court noted while allowing the writ petition.